Financial Mediation

Financial Mediation

Financial mediation helps separating couples reach fair agreements about money, property, and assets without the cost and stress of court proceedings. It is the cheapest way to get divorced when there are financial disputes to resolve, and it puts you in control of the outcome rather than leaving it to a judge.

According to the National Audit Office, the average cost of resolving a financial dispute through the courts is between £5,000 and £30,000 per person. Mediation typically costs under £2,000 total for both parties. At BookMIAM, sessions cost a fixed fee of £150 per person, meaning most financial mediations are resolved for a fraction of the cost of a single day in court.

What Financial Mediation Covers

• The family home: whether to sell, transfer ownership, or agree on a deferred sale.
• Other property: including buy-to-let, investment properties, or property abroad.
• Pension sharing in divorce: how to divide pension assets fairly, including pension sharing orders, offsetting, or pension attachment.
• Savings and investments: bank accounts, ISAs, shares, and other financial assets.
• Debts: mortgages, loans, credit cards, and how responsibility is divided.
• Spousal maintenance: whether one party should make regular payments to the other, and for how long.
• Child maintenance: while the Child Maintenance Service handles most calculations, mediation can help with top-up arrangements or school fees.

Financial disputes during separation can feel overwhelming. There are often years of shared financial decisions to untangle, and emotions run high when the family home, pensions, and children’s futures are at stake. What I find in practice is that once both parties sit down with full financial disclosure in front of them, the conversation becomes more grounded. Numbers have a way of cutting through assumptions and bringing clarity to what is actually possible.

Financial Settlement After Divorce

Since the introduction of no fault divorce in the UK, more couples are using mediation to reach a financial settlement without the hostility of contested court proceedings. A financial settlement covers everything: property, pensions, savings, debts, and ongoing maintenance.

The court’s starting point in any financial settlement is a 50/50 split of matrimonial assets. However, the final outcome depends on a range of factors set out in Section 25 of the Matrimonial Causes Act 1973, including the needs of any children, each party’s earning capacity, the length of the marriage, and each person’s contributions (both financial and non-financial). Mediation allows you to have these conversations openly and reach an outcome that feels fair to both of you, rather than having a judge apply a formula to your life.

Financial Disclosure

Financial mediation begins with both parties completing a financial disclosure. This is a full and honest account of your income, assets, liabilities, and outgoings. It is similar to the Form E process used in court, but less formal and less adversarial.

Open financial disclosure is the foundation of fair mediation. Without it, neither party can make informed decisions, and any agreement reached would be vulnerable to challenge. Your mediator will guide you through what is needed and ensure that both sides provide equivalent information. This is not about catching anyone out. It is about creating a level playing field so that both of you can negotiate from a position of knowledge.

Common documents you will need include mortgage statements, pension valuations, bank statements, payslips, tax returns, and valuations of any significant assets. Your mediator will provide a checklist at the start of the process.

Spousal Maintenance

Spousal maintenance is a regular payment from one ex-partner to the other after divorce. Whether maintenance is appropriate depends on factors like each person’s income, earning capacity, age, health, and the length of the marriage. Mediation helps you have an open, honest conversation about maintenance without the adversarial approach of court, where a judge would decide for you.

The trend in recent years has been towards shorter-term maintenance orders, often described as rehabilitative maintenance, which are designed to support the lower-earning spouse while they retrain, return to work, or increase their earning capacity. The court’s preference, where possible, is for a clean break. Mediation gives you the flexibility to design a maintenance arrangement that reflects your actual circumstances, rather than relying on a court-imposed formula that may not fit your lives.

Pension Sharing in Divorce

Pensions are often the second largest asset after the family home, and pension sharing in divorce is one of the most complex areas to resolve. There are three main options:

• Pension sharing orders: a percentage of one person’s pension is transferred to the other, creating two separate pension pots.
• Pension offsetting: the pension is offset against other assets like the house. For example, one party keeps the pension while the other receives a larger share of the property.
• Pension attachment: a portion of the pension income is paid to the other party when the pension comes into payment.

Your mediator will help you understand the options and encourage you to seek independent financial advice where needed. Mediation does not replace financial advice, but it provides the framework for reaching an agreement. In my experience, pension sharing is the area where independent financial advice makes the most material difference. The cash equivalent transfer value (CETV) of a pension does not always reflect its true worth, particularly with defined benefit schemes, and getting a proper actuarial assessment can prevent costly mistakes.

Clean Break Orders

A clean break order is a type of consent order that ends the financial ties between you and your ex-partner permanently. Once a clean break is in place, neither party can make future financial claims against the other. This provides certainty and closure for both sides.

Without a clean break order, either party could potentially make a financial claim years after the divorce. There have been well-publicised cases where former spouses have successfully made claims decades after the marriage ended. This is why it is strongly recommended that any financial agreement reached in mediation is formalised through a consent order with a clean break clause. The peace of mind it provides is worth far more than the cost of having a solicitor draft it.

Consent Orders After Mediation

If you reach a financial agreement through mediation, it is strongly recommended that you have it made into a consent order. A consent order is a legal document approved by the court that makes your agreement legally binding. Without one, either party could make a financial claim in the future.

The process is straightforward: your mediator prepares a memorandum of understanding (MOU) summarising what you have agreed. You each take that to a solicitor, who drafts the consent order and submits it to the court for approval. The court fee for a consent order is currently £53, and most solicitors charge between £500 and £1,500 to draft one. Compared to the cost of contested proceedings, this is a modest investment for a legally binding outcome.

How Financial Mediation Works

Financial mediation typically involves both parties completing a financial disclosure, so the mediator and both sides have a clear picture of all assets, income, and liabilities. This is similar to the Form E process used in court, but less formal.

Your mediator helps you explore options and consider what a fair outcome might look like. They do not give financial advice, but they can help you understand the issues and encourage you to seek independent legal advice where needed.

Most financial mediations are resolved within 3 to 5 sessions. At BookMIAM, an open statement of financial information costs a fixed fee of £150 per person, and a memorandum of understanding costs £300 per person. Many couples are also eligible for the government’s £500 family mediation voucher scheme, which can significantly reduce the cost of mediation.

MIAM for Form A

If you need to apply to the court for a financial order after divorce, you must submit a Form A. Since April 2024, a MIAM for Form A is required before you can submit your application. Your mediator will sign the relevant section after your MIAM. If the other party refuses to engage, your mediator will confirm this on the form so you can proceed with your court application.

At BookMIAM, you can attend a MIAM and have your Form A signed within days, with no waiting lists.

Related Guides

• What Is a MIAM?
• How Mediation Works
• Child Arrangements
• £500 Voucher Scheme
• Pricing

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